Geography

This Central American country lies between
Nicaragua to the north and Panama to the south. Its area slightly exceeds
that of Vermont and New Hampshire combined. It has a narrow Pacific
coastal region. Cocos Island (10 sq mi; 26 sq km), about 300 mi (483 km)
off the Pacific Coast, is under Costa Rican sovereignty.

Government

Democratic republic.

History

Costa Rica was inhabited by an estimated 400,000
Indians when Columbus explored it in 1502. The Spanish conquest began in
1524. The region grew slowly and was administered as a Spanish province.
Costa Rica achieved independence in 1821 but was absorbed for two years by
Agustín de Iturbide in his Mexican empire. It became a republic in
1848. Except for the military dictatorship of Tomás Guardia from
1870 to 1882, Costa Rica has enjoyed one of the most democratic
governments in Latin America.

In the 1970s, rising oil prices, falling
international commodity prices, and inflation hurt the economy. Efforts
have since been made to reduce reliance on coffee, banana, and beef
exports. Tourism is now a major business. Óscar Arias
Sánchez worked to simultaneously heal his country's economic woes and foster peace in Central America.

José Maria Figueres Olsen of the National
Liberation Party became president in 1994. He opposed economic suggestions
made by the International Monetary Fund, instead favoring greater
government intervention in the economy. The World Bank subsequently
withheld $100 million of financing. In 1998, Miguel Angel Rodríguez
of the Social Christian Unity Party became president, pledging economic
reforms, such as privatization. In 2000, Costa Rica and Nicaragua resolved
a long-standing dispute over navigation of the San Juan River, which forms
their shared border. A psychiatrist, Abel Pacheco, also of the Social Christian
Unity Party, won the presidency in elections held in April 2002. In May
2003, several national strikes took place, by energy and
telecommunications workers over privatization and by teachers over their
salaries.